Measure lowers credit card rates

Santo Domingo.- The Monetary Board on Wednesday issued new regulations on the use of credit cards and lower their cost and also ordered greater transparency to benefit cardholders.

Current rates for consumer loans are as high as 35 percent, while the average interest on credit cards is 82 percent.

The measure will lead to significantly lower rates until the financial sector now charges for that service.

The provision, approved by the Monetary Board on February 7, limits issuers from charging cardholders interest on interest, and reiterates that that calculation should be on the unpaid balance.

The measure also provides that statements specify the rate in effect and a breakdown of the various preset fees and charges.

“With this new regulation, the Monetary Board brings another key link to contribute to a more balanced and fair financial inclusion, the high level of transparency that said issuers should show to their cardholders and the benefits in terms of cost reduction be generated for them,” the Central Bank said in a statement.

Effective immediately

The Monetary Board’s measure takes effect today Thursday, according to the resolution, and includes the amendment of contracts associated with the process. It stipulates that card issuers may not modify contract terms without the user’s permission.